Atara Biotherapeutics, Inc. (NASDAQ:ATRA) Q3 2023 Earnings Call Transcript

Atara Biotherapeutics, Inc. (NASDAQ:ATRA) Q3 2023 Earnings Call Transcript November 4, 2023

Operator: Good morning, and thank you for standing by. Welcome to Atara Biotherapeutics’ Third Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please be advised that today’s call is being recorded. I would now like to hand the call over to Alex Chapman, Vice President of Corporate Communications and Investor Relations at Atara Biotherapeutics. Please go ahead, sir.

Alex Chapman: Thank you, Sherry. Good morning, everyone, and welcome to Atara’s conference call to discuss our expanded tab-cel global partnership with Pierre Fabre Laboratories and our third quarter 2023 update. Earlier today, we issued a press release announcing this partnership and our third quarter financial results. This press release and an updated slide deck are available in the Investors & Media section at atarabio.com. Joining me on today’s call are Dr. Pascal Touchon, President and Chief Executive Officer; and Eric Hyllengren, Chief Financial Officer. We will begin with prepared remarks, then open the call for your questions. We would like to remind listeners that during the call, the company’s management will be making forward-looking statements.

Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the company’s business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today’s press release and the company’s SEC filings. These statements are made as of today’s date, and the company undertakes no obligation to update these statements. Now I’d like to turn the call over to Pascal. Pascal?

Dr. Pascal Touchon: Thank you, Alex, and thank you all for joining us this morning. Today, we announced the global expansion of our tab-cel partnership with Pierre Fabre Laboratories. We are already successfully launching this product across Europe. In parallel, we announced a strategic restructuring that together with the expanded tab-cel partnership will extend Atara’s planned cash runway into Q3 2025. This positions us well to continue building the value of our pipeline, including through anticipated clinical milestone for ATA188 with the EMBOLD readout in early November as well as initial data for the ATA3219 program in lymphoma. Now I’ll start by covering the details of the partnership and strategic restructuring, followed by upcoming clinical milestones.

After a competitive process, with significant interest from across the spectrum of large pharma, midsize pharma and biotech companies, we are excited to announce an expanded partnership with Pierre Fabre to commercialize tab-cel in the U.S. and all remaining global markets. This moment signifies the pivotal transition in Atara’s evolution. We are now optimally positioned as a nimble allogeneic T cell immunotherapy company with near-term catalysts and the opportunity to advance a pipeline of differentiated therapies across a range of oncology and autoimmune indications from our proven EBV T cell platform. We sought a partner that is committed to deliver tab-cel, a product with life-saving potential, to the U.S. and global patients. In parallel, we pursued a deal structure that meaningfully reduces our cash burn over the next 2 years and provides Atara and shareholders with significant value, both through short-term cash and potential milestone payments and long-term significant double-digit royalties.

Pierre Fabre brings substantial and demonstrated capabilities, evidenced by the successful launch of tab-cel, branded as Ebvallo, in European markets. We have found them to be committed collaborators of adding [indiscernible] to expand our partnership for tab-cel to reach as many patients as possible worldwide. Specific to the U.S., which is the largest commercial opportunity, Pierre Fabre is in a strong position to succeed, strengthening their U.S. presence with tab-cel as their flagship product and building on to the marketing experience in Europe. Now for the specifics. Atara will receive up to $640 million in additional consideration, plus significant double-digit tiered royalties on net sales. As part of the deal, we will receive approximately $30 million at deal closing in upfront and inventory purchase and $100 million more in potential regulatory milestone payment through potential BLA approval.

In addition, Pierre Fabre will reimburse Atara for expected tab-cel global development cost through BLA approval and will purchase existing and future tab-cel inventory on the BLA transfer date. Substantially, all tab-cel manufacturing, regulatory and development activities are targeted to transition from Atara to Pierre Fabre at the time of the BLA approval transfer. We remain confident that tab-cel represents a significant business opportunity with several hundred EBV+ PTLD addressable patients in the US alone, who could benefit from this potentially life-saving therapy with a favorable safety profile. With significant pricing potential based on its value for patients and health care systems in such an ultra-rare disease, we believe that tab-cel has the potential to deliver U.S. peak sales of over $500 million per year following potential label expansion from the multi-cohort study.

With future sales milestone and significant double-digit royalty through our agreement with Pierre Fabre, we believe U.S. tab-cel commercialization will progressively grow future revenues for Atara over the term of the agreement. As we continue to evolve as an organization focused on developing innovative allogeneic cell therapies for cancer and autoimmune disease, we are undertaking a strategic restructuring to reduce our current workforce by approximately 30%. The benefits of the expanded tab-cel partnership as well with the restructuring are anticipated to reduce our planned cash expenditures from 2023 levels by approximately 40% or $100 million by the end of ‘25. I would like to extend my sincere gratitude to all Atara staff both who’s continuing to the next phase of Atara and those departing for their unwavering commitment to the patient’s lives we seek to transform and their significant contributions in advancing truly innovative medicine for patients in need.

A healthcare professional examining T-cell immunotherapy.

Thank you for what you have done to get us where we are today. We believe these actions, when combined with cash of approximately $102 million on September 30, 2023, and certain anticipated payments from the expanded tab-cel commercial partnership will be sufficient to fund Atara planned operations into Q3 2025. This will position Atara well to deliver multiple anticipated clinical milestones, including the early November EMBOLD data readout as well as key data readout for the ATA3219 program in lymphoma and potentially in autoimmune disease. On the regulatory front, we are encouraged from the recent positive FDA assessment of comparability that supports pulling the pivotal clinical data from different process versions of tab-cel in the BLA submission expected in Q2 2024.

We now have a clear plan for the clinical data package, and the expected BLA submission timing aligns with our filing strategy to include the latest pivotal ALLELE study data for inclusion in and to obviously support both the pre-BLA meeting and anticipated BLA filing package. We’re also excited to disclose initial data from our Phase II multi-cohort study with various EBV+ cancer in December at ESMO I-O. Now on to ATA188 or potentially transformative therapy for people living with progressive multiple sclerosis. The primary analysis readout for the Phase II double-blind, placebo-controlled EMBOLD study is on track for early November, which will include the primary outcome merger of confirmed disability improvement by EDSS and relevant imaging and free biomarkers for more than 90 patients.

This includes a number of patients that enrolled earlier in the study and have been evaluated beyond the primary endpoint of 12 months at 15, 18, 21 and 24 months. The EDSS data from these later time points will be analyzed as part of the primary analysis, and may give a sense of ATA188 impact on EDSS stability and progression, which usually requires longer follow-up time to assess the disability improvement. Our goal is to disclose sufficient study data to allow investors to result potential value of ATA188 in nonactive progressive MS. As a reminder, significant unmet need remains in progressive MS, especially in nonactive progressive MS, which represents the vast majority of the progressive MS population and is a focus of the EMBOLD study.

There are no approved therapies right now that have demonstrated disability improvement for nonactive progressive MS. The currently approved therapies only demonstrate more the slowing of disability progression with an approximately 6% difference versus placebo that is primarily driven by patient with active disease. As a result, anything better than the ranging from more slowing of progression to stabilization of disability to trends for disability improvement to significant improvement is potentially transformative and sets up the others and robust clinical development opportunities, including potential pivotal Phase III trials. Finally, we are progressing our potential best-in-class allogeneic CAR-T assets, which could play a foundational role in our portfolio moving forward.

We will focus resources in the near term on clinical development of ATA3219 following recent IND clearance and on preclinical activities for ATA3431 or CD19, CD20 targeted CAR-T. While these are the programs that have the highest potential for value creation over the next 2 years, we will also continue to strategically invest in other attractive targets and platform enhancements. With respect to ATA3219 or allogeneic CAR-T for B-cell malignancies expressing CD19, we are progressing to activate study centers and start enrolling patients in the coming months in the Phase I study in relapsed or refractory B-cell NHL. We expect preliminary clinical data in the second half of 2024. We are particularly excited to bring this allogeneic CD19 CAR-T asset to the clinic as it’s been optimized to offer a potential best-in-class product profile, featuring off-the-shelf availability and clinically validated technologies like the 1XX signaling domain associated with favorable response rate and durability, enrichment for less differentiated T cell memory phenotype for improved clinical responses and retention of the endogenous T cell receptor, which may be a crucial survival signal for T cells.

We are also pleased that ATA3431, an allogeneic bispecific CAR directed against CD19 and CD20 built on the EBV T cell platform with the 1XX costimulatory domain is moving into IND-enabling studies with competitive profile. Compared to an autologous CD19, CD20 CAR-T benchmark, technical data demonstrate potent antitumor activity, long-term persistence and superior tumor growth inhibition. And this has been accepted for poster presentation at the upcoming ASH meeting in December. Beyond oncology, there has been high interest recently in the potential of CAR-T cell therapies for autoimmune disease with remarkable results from early data in patients living with severe respiratory disease such as lupus. At Atara, we have believed for a while in the important role cell therapy can play in addressing autoimmune conditions.

With ATA188, Atara is pioneering the use of an allogeneic T cell immunotherapy in the neurological autoimmune condition. Building on this experience, we are actively considering option best suited for auto allogeneic CAR-T disease therapies in autoimmune disease. Our EBV T cells have compelling potential benefits like persistence and favorable safety with no requirement for complex genetic editing. Specifically, they possess a memory phenotype that can expand and traffic to site of disease, which provide a versatile platform with off-the-shelf accessibility that can address several potential shortcomings of other approaches. To that hand, we are actively progressing efforts toward the potential IND to evaluate ATA3219 in autoimmune disease in parallel with NHL development.

More to come on that soon. To close, we’re excited about the near term opportunities for Atara to demonstrate the potential of our pipeline. We are coming up to one of the most exciting milestones in Atara’s history with a primary analysis result of the EMBOLD study very soon, and we are now well capitalized with planned cash runway into Q3 2025 to pursue our potential best-in-class portfolio of CAR T assets in areas of great unmet need where we believe we can make the biggest difference. I will now turn the call over to the operator for the Q&A part of the call. Operator?

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